THE PRESIDENT: John, thank you very much. I thought for a minute you were
going to say I was your favorite rabbi, but -- (laughter.)

I appreciate you giving me a chance to come. I, too, want to thank Mr.
Saban for his vision and for sponsoring this forum. I am honored to be
with you. Madam Secretary, thank you for joining us. Justice Breyer, I am
pleased to see you yet again. I thank Ambassador Indyk. Minister Mofaz,
it's good to see you, sir, and I appreciate you being here for this Forum

I want to thank the members of Congress who have joined us, members of the
diplomatic corps, and of course, the distinguished guests.

The Saban Forum is one of the world's premier venues for discussion on the
Middle East. I thank you for the debate you provoke, and the differences
you have made. And I'm honored to be with you.

Over the past eight years, I have had the privilege to see the Middle East
up close. I have stood on the shores of the Sea of Galilee, and I've hiked
the cliffs of Masada. I've enjoyed dinner in the desert of Abu Dhabi, and
prayed at the Church of the Nativity in Bethlehem. I have looked into the
eyes of courageous elected leaders from Iraq, Lebanon, Israel, and the
Palestinian Territories. I have been convinced that no region is more
fundamental to the security of America or the peace in the world than the
Middle East.

This evening, I'll share some thoughts on our policies in the region these
past eight years, and our vision for the future -- a Middle East where our
friends are strengthened and the extremists are discredited, where
economies are open and prosperity is widespread, and where all people enjoy
the life of liberty that is the universal gift of an Almighty God.

From our earliest days as a nation, the Middle East has played a central
role in American foreign policy. One of America's first military
engagements as an independent nation was with the Barbary pirates. One of
our first consulates was in Tangiers. Some of the most fateful choices
made by American Presidents have involved the Middle East -- including
President Truman's decision to recognize Israel 60 years ago this past May.

In the decades that followed that brave choice, American policy in the
Middle East was shaped by the realities of the Cold War. Together with
strong allies in the Middle East, we faced down and defeated the threat of
communism to the region. With the collapse of the Soviet Union, the
primary threat to America and the region became violent religious
extremism. Through painful experience, it became clear that the old
approach of promoting stability is unsuited to this new danger -- and that
the pursuit of security at the expense of liberty would leave us with
neither one. Across the Middle East, many who sought a voice in the future
of their countries found the only places open to dissent were radical
mosques. Many turned to terror as a source of empowerment. And as a new
century dawned, the violent currents swirling beneath the Middle East began
to surface.

In the Holy Land, the dashed expectations resulting from the collapse of
the Camp David peace talks had given way to the second intifada.
Palestinian suicide bombers struck with horrific frequency and lethality.
They murdered innocent Israelis at a pizza parlor, or aboard buses, or in
the middle of a Passover Seder. Israeli Defense Forces responded with
large-scale operations. And in 2001, more than 500 Israelis and
Palestinians were killed.

Politically, the Palestinian Authority was led by a terrorist who stole
from his people and walked away from peace. In Israel, Ariel Sharon was
elected to fight terror and pursue a "Greater Israel" policy that allowed
for no territorial concessions. Neither side could envision a return to
negotiations or the realistic possibility of a two-state solution.

Elsewhere in the Middle East, Saddam Hussein had begun his third decade as
the dictator of Iraq -- a reign that included invading two neighbors,
developing and using weapons of mass destruction, attempting to exterminate
Marsh Arabs and many Kurds, paying the families of suicide bombers,
systematically violating U.N. resolutions, and firing routinely at British
and U.S. aircraft patrolling a no-fly zone.

Syria continued its occupation of Lebanon, with some 30,000 troops on
Lebanese soil. Libya sponsored terror and pursued weapons of mass
destruction. And in Iran, the prospect of reform was fading, the regime's
sponsorship of terror continued, and its pursuit of nuclear weapons was
largely unchecked.

Throughout the region, suffering and stagnation were rampant. The Arab
Human Development Report revealed a bleak picture of high unemployment,
poor education, high mortality rates for mothers, and almost no investment
in technology. Above all, the Middle East suffered a deep deficit in
freedom. Most people had no choice and no voice in choosing their leaders.
Women enjoyed few rights. And there was little conversation about
democratic change.

Against this backdrop, the terrorist movement was growing in strength and
in ambition. Three decades, violent radicals had landed painful blows
against America -- the Iranian hostage crisis, the attacks on our embassy
and Marine barracks in Beirut, the destruction of Pan Am Flight 103, the
truck bombing of the World Trade Center, the attack on Khobar Towers, the
bombing of our embassies in Kenya and Tanzania, and the strike on the USS
Cole.

And then came September the 11th, 2001, when 19 men from the Middle East
carried out the worst attack on the United States since the strike on Pearl
Harbor 67 years ago this weekend. In the space of a single morning, 9/11
etched a sharp dividing line in our history. We realized that we're in a
struggle with fanatics pledged to our destruction. We saw that conditions
of repression and despair on the other side of the world could bring
suffering and death to our own streets.

With these new realities in mind, America reshaped our approach to the
Middle East. We made clear that we will defend our friends, our interests,
and our people against any hostile attempt to dominate the Middle East --
whether by terror, blackmail, or the pursuit of weapons of mass
destruction. We have carried out this new strategy by following three
overriding principles.

First, we took the offense against the terrorists overseas. We are waging
a relentless campaign to break up extremist networks and deny them safe
havens. As part of that offensive, we pledged to strengthen our
partnership with every nation that joins in the fight against terror. We
deepened our security cooperation with allies like Jordan and Egypt, and
with our friends in the Gulf. Saudi Arabia, long a breeding ground for
radicalism, has become a determined partner in the fight against terror --
killing or capturing hundreds of al Qaeda operatives in the Kingdom. We
dramatically expanded counterterrorism ties with partners in North Africa.
And we left no doubt that America would stand by our closest ally in the
Middle East -- the state of Israel. (Applause.)

Second, we made clear that hostile regimes must end their support for
terror and their pursuit of weapons of mass destruction, or face the
concerted opposition of the world.

This was the approach we took in Iraq. It is true, as I've said many
times, that Saddam Hussein was not connected to the 9/11 attacks. But the
decision to remove Saddam from power cannot be viewed in isolation from
9/11. In a world where terrorists armed with box cutters had just killed
nearly 3,000 of our people, America had to decide whether we could tolerate
a sworn enemy that acted belligerently, that supported terror, and that
intelligence agencies around the world believed had weapons of mass
destruction.

It was clear to me, it was clear to members of both political parties, and
to many leaders around the world that after 9/11, that was a risk we could
not afford to take. So we went back to the United Nations Security
Council, which unanimously passed Resolution 1441 calling on Saddam Hussein
to disclose, disarm, or face serious consequences. With this resolution,
we offered Saddam Hussein a final chance to comply with the demands of the
world. And when he refused to resolve the issue peacefully, we acted with
a coalition of nations to protect our people and liberated 25 million
Iraqis.

When Saddam regimes -- regimes fell -- when Saddam's regime fell, we
refused to take the easy option and install a friendly strongman in his
place. Even though it required enormous sacrifice, we stood by the Iraqi
people as they elected their own leaders and built a young democracy. When
the violence reached its most dire point, pressure to withdraw reached its
height. Yet failure in Iraq would have unleashed chaos, widened the
violence, and allowed the terrorists to gain a new safe haven -- a
fundamental contradiction to our vision for the Middle East.

So we adopted a new strategy, and deployed more troops to secure the Iraqi
people. When the surge met its objective, we began to bring our troops
home under the policy of return on success. Yesterday, building on the
gains made by the surge, the democratic government of Iraq approved two
agreements with the United States that formalize our diplomatic, economic,
and security ties and set a framework for the drawdown of American forces
as the fight in Iraq nears its successful end.

After 9/11, we also confronted Libya over its weapons of mass destruction.
The leader of Libya made a wise choice. In 2003, Colonel Ghadafi announced
that he would abandon his weapons of mass destruction program. He
concluded that the interests of his people would be best served by
improving relations with America, and Libya turned over its nuclear
centrifuges and other deadly equipment to the United States.

The defeat of Saddam also appears to have changed the calculation of Iran.
According to our intelligence community, the regime in Tehran had started a
nuclear weapons program in the late-1980s, and they halted a key part of
that program in 2003. America recognized that the most effective way to
pursue -- persuade Iran to remove its nuclear weapons -- renounce its
nuclear weapons ambitions was to have partners at our side, so we supported
an international effort led by our allies in Europe. This diplomacy
yielded an encouraging result, when Iran agreed to suspend its uranium
enrichment.

Sadly, after the election of President Ahmadinejad, Iran reversed course
and announced it would begin enriching again. Since then, we've imposed
tough sanctions through United Nations resolutions. We and our partners
have offered Iran diplomatic and economic incentives to suspend enrichment.
We have promised to support a peaceful civilian nuclear program. While
Iran has not accepted these offers, we have made our bottom line clear:
For the safety of our people and the peace of the world, America will not
allow Iran to develop a nuclear weapon.

Third, America identified the lack of freedom in the Middle East as a
principal cause of the threats coming from the region. We concluded that
if the region continued on the path it was headed -- if another generation
grew up with no hope for the future, and no outlet to express its views --
the Middle East would continue to simmer in resentment and export violence.

To stop this from happening, we resolved to help the region steer itself
toward a better course of freedom and dignity and hope. We're engaged in a
battle with the extremists that is broader than a military conflict, and
broader than a law enforcement operation. We are engaged in an ideological
struggle. And to advance our security interests and moral interests,
America is working to advance freedom and democracy as the great
alternatives to repression and terror.

As part of this effort, we're pressing nations across the region --
including our friends -- to trust their people with greater freedom of
speech, and worship, and assembly. We're giving strong support to young
democracies. We're standing with reformers, and dissidents, and human
rights activists across the region. Through new efforts like the Middle
East Peace Partnership Initiative and the Broader Middle East and North
Africa Initiative, we're supporting the rise of vibrant civil societies.

We're also advancing a broader vision that includes economic prosperity,
quality health care and education, and women's rights. We've negotiated
new free trade agreements in the region, supported Saudi Arabia's accession
to the World Trade Organization, and proposed a new Middle East Free Trade
Area. We have signed Millennium Challenge agreements with Jordan and
Morocco to grant American assistance in return for anti-corruption
measures, free market policies, and investments in health and education.
We're training Middle Eastern schoolteachers, translating children school
books into Arabic, and helping young people get visas to study here in the
United States.

We're encouraging Middle Eastern women to get involved in politics, and to
start their own businesses, and take charge of their health through wise
practices like breast cancer screening. Efforts like these extend hope to
the corners of despair, and in this work we have had a lot of help, but no
finer ambassador of goodwill than my wife, Laura Bush. (Applause.)

Finally, to advance all the principles that I've outlined -- supporting our
friends, and pressuring our adversaries, and extending freedom -- America
has launched a sustained initiative to help bring peace to the Holy Land.
At the heart of this effort is the vision of two democratic states, Israel
and Palestine, living side by side in peace and security. I was the first
American President to call for a Palestinian state, and support -- and
build support for the two-state solution has been a top priority of my
administration.

To earn the trust of Israeli leaders, we made it clear that no Palestinian
state would be born of terror, we backed Prime Minister Sharon's courageous
withdrawal from Gaza, and we supported his decision to build a security
fence, not as a political border but to protect the people from terror.

To help the Palestinian people achieve the state they deserve, we insisted
on Palestinian leadership that rejects terror and recognizes Israel's right
to exist. Now that this leadership has emerged, we're strongly supporting
its efforts to build institutions of a vibrant democratic state.

With good advice from leaders like Former Prime Minister Tony Blair and
Generals Jones, Dayton, Fraser, and Selva, the Palestinians are making
progress toward capable security forces, a functioning legal system,
government ministries that deliver services without corruption, and a
market economy. In all our efforts to promote a two-state solution, we
have included Arab leaders from across the region, because we fully
understand that their support will be essential for the creation of a state
and lasting peace.

Last fall at Annapolis, Israeli, Palestinian, and Arab leaders came
together at an historic summit. President Abbas and Prime Minister Olmert
agreed to launch direct negotiations on a peace agreement. Nations around
the globe, including many in the Arab world, pledged to support them. The
negotiations since Annapolis have been determined and substantial.
Secretary Rice has encouraged both sides by hosting a series of trilateral
meetings. And while the Israelis and Palestinians have not yet produced an
agreement, they have made important progress. As they stated to the
Quartet, they have laid a new foundation of trust for the future.

On this issue -- and on our overall approach to the Middle East these past
eight years -- America has been ambitious in vision, we have been bold in
action, and we have been firm in purpose. Not every decision I've made has
been popular, but popularity was never our aim. Our aim was to help a
troubled region take the difficult first steps on the long journey to
freedom and prosperity and hope. Some have called this idealistic, and no
doubt it is. Yet it is the only practical way to help the people of the
Middle East realize the dignity and justice they deserve. And it is the
only practical way to protect the United States of America in the long
term.

As with any large undertaking, these efforts have not always gone according
to plan, and in some areas we've fallen short of our hopes. For example,
the fight in Iraq has been longer and more costly than expected. The
reluctance of entrenched regimes to open their political systems has been
disappointing. There have been unfortunate setbacks at key points in the
peace process -- including the illness suffered by Prime Minister Sharon,
the Hamas victory in the Palestinian elections, and the terrorist takeover
of Gaza.

Despite these frustrations and disappointments, the Middle East in 2008 is
a freer, more hopeful, and more promising place than it was in 2001:

For the first time in nearly three decades, the people of Lebanon are free
from Syria's military occupation. Libya's nuclear weapons equipment is
locked away in Oak Ridge, Tennessee. Places like the UAE and Bahrain are
emerging as centers of commerce. The region -- the regime in Iran is
facing greater pressure from the international community than ever before.
Terrorist organizations like al Qaeda have failed decisively in their
attempts to take over nations. They're increasingly facing ideological
rejection in the Arab world.

Iraq has gone from an enemy of America to a friend of America, from
sponsoring terror to fighting terror, and from a brutal dictatorship to a
multi-religious, multi-ethnic constitutional democracy. Instead of the
Iraq we would see if a Saddam Hussein were in power -- an aggressive regime
vastly enriched by oil, defying the United Nations, bullying its Arab
neighbors, threatening Israel, and pursuing a nuclear arms race with Iran
-- we see an Iraq emerging peacefully with its neighbors, welcoming Arab
ambassadors back to Baghdad, and showing the Middle East a powerful example
of a moderate, prosperous, free nation.

The most vexing problem in the region -- the Israeli-Palestinian conflict
-- there is now greater international consensus that at any point in modern
memory. Israelis, Palestinians, and Arabs recognize the creation of a
peaceful, democratic Palestinian state is in their interests. And through
the Annapolis process, they started down a path that will end with two
states living side by side in peace.

In fits and starts, political and economic reforms are advancing across the
Middle East. Women have run for office in several nations and been named
to important government positions in Bahrain and Oman and Qatar, the UAE
and Yemen. Trade and foreign investment have expanded. Several nations
have opened up private universities, and Internet use has risen sharply.
Across the region, conversations about freedom and reform are growing
louder. Expectations about government responsiveness are rising. And
people are defying the condescending view that the culture of the Middle
East is unfit for freedom.

There are still serious challenges facing the Middle East. Iran and Syria
continue to sponsor terror. Iran's uranium enrichment remains a major
threat to peace. Many in the region still live under oppression. Yet the
changes of the past eight years herald the beginning of something historic
and new. At long last, the Middle East is closing a chapter of darkness
and fear, and opening a new one written in the language of possibility and
hope. For the first time in generations, the region represents something
more than a set of problems to be solved, or the site of energy resources
to be developed. A free and peaceful Middle East will represent a source
of promise, and home of opportunity, and a vital contributor to the
prosperity of the world.

Those who ask what this future will look like need only look around. We
see the new story of the Middle East in Iraqis waving ink-stained fingers,
with Lebanese taking to streets in the Cedar Revolution. We see it in
women taking their seats in elected parliaments, and bloggers telling the
world their dreams. We see it in the skyscrapers rising above Abu Dhabi,
and living --thriving Middle Eastern businesses that are now connected to
the global economy. We see it in a Saudi king sponsoring an interfaith
dialogue, Palestinian reformers fighting corruption and terror, and
Israelis who love their ancient land, but want to live in peace.

These are striking images, and they do point the way to a brighter future.
I believe the day will come when the map of the Middle East shows a
peaceful, secure Israel beside a peaceful and democratic Palestine. I
believe the day will come when people from Cairo and Riyadh to Baghdad and
Beirut, to Damascus and Tehran, live in free and independent societies,
bound together by the ties of diplomacy and tourism and trade. The day
will come when al Qaeda and Hezbollah and Hamas are marginalized and then
wither away, as Muslims across the region realize the emptiness of the
terrorists' vision and the injustice of their cause.

Earlier this year, I laid out this vision in my address to the Israeli
Knesset, and then in my address to the World Economic Forum in Egypt. It
was not a Jewish vision, or an Arab vision, or an American vision. It is a
universal vision. It unites all who yearn for freedom and peace in the
Middle East. And if we lead, and if we persevere, and if we keep faith in
our ideals, that vision will become a reality someday.